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Whether you follow the debate about student debt or not, one thing is clear: financial aid for higher education is an investment in our collective future.  It is in our best interest to regulate how that investment is stewarded to ensure that our hopes aren't wasted on beer and hot new cars.

Those of us who've been to college know the stories.  You dorm-mate who vanished with the Pell Grant that was meant for his Dad.  The suddenly flush, then tragically broke friend who just had to live off campus.  And then there was that guy who never showed up to class after the first week and found out the hard way that the Fed's weren't kidding when they said that money was for school and school alone.  

We've all had those experiences, and we all understand the consequences through their sometimes comical instruction.  But what happens when it's big business that's wasting away the investment we've made in the future of these students, and our economy?

Why, we pat them on the backs and toast their $186 million success, of course no matter what shady tricks they pulled to get there.

Higher One Holdings, Inc. was founded in 2000 by three students at Yale.  It was their premise that students just weren't being served in the classic, financial sense.  You know, they weren't raped and bleeding rectally then charged a separate fee for the privilege of attracting their attentions, henceforth to be referred to as "customer service."

Colleges and Universities were feeling the pinch as state budgets chipped away at their funding across the nation.  They groped desperately for any way to reduce expenditures and not sacrifice the quality of their main service: education.  They understood all too well the political climate that was to be endured for yet another generation.  While sports budgets bolstered pride in the school as a community resource, the business of education was too "Professorial" and "Elitist" for plutocratic America, and their low-rent Republican dogs.  

Students, for whom higher education existed, were the eventual targets.  Slowly, as if a fog in the night, Higher One and their ilk encroached on the final bastion of social mobility.

Financial Aid.

In 1965 Lyndon B. Johnson signed into law the Higher Education Act.  It was this law that would be honed again and again into a vital tool in the success of the American information economy.  For the first time in our history, low income students and families received direct financial aid.  It was the view that one's immediate environment did not dictate their potential that changed the face of American Higher Education.  

Fast forward 35 years, and now almost 12 years ago, to those three students from Yale, big business has finally found their way into the heart of the student financial aid process.  

Higher One saw a market for a for-profit company to low-bid financial aid disbursements amidst the budget woes of higher education.  With their funding being cut to the bone, colleges and universities were more than happy to contract the costly process of issuing federal and state financial aid disbursements at a fraction of their cost.  And hey, Higher One could even do their payroll!

Nevertheless, they still had to sell this idea to students, and in came the Debit Card.  Higher One issues debit cards to all students of institutions they contract with, each displaying a glittering MasterCard logo whether they want one or not.  "It's easy," they said.  "It's simple," they cried.  "It's faster!" they bellowed.  "And it's free!  Well, not really free, you understand, but it's not like it COSTS anything, so it's like, basically free as long as you don't look too close at what we're doing over here, or over there, or here, and there, and everywhere."

Fees were the key.  Little fees, big fees, lazy fees, PIN fees, and "I'm gonna steal all your money fifty-cents at a time," fees.

Higher One's Fee Schedule

I want to screen cap it just to make sure they don't do something shifty.  Digital proof is still proof.

You see, $.50 wasn't just $.50.  The transaction fees of 5.8 million student account holders earned them 14% of their earnings in the 3rd quarter of 2011 according to their own data reaching the sum of $6.6 million.  But account fees made MasterCard's transaction allowances look like a piker.  $35.8 million, an estimated 74% of their revenue came from this one source.  Bank of America should do so well.

Hold on, that was just for their 3rd quarter!  Total revenue is expected to summit at an estimated $186 million.  Summit?  It only goes up from there.  Projections for 2012 show an estimated total revenue of $237 million!

Higher One Holdings, Inc. Quarterly Earnings Reports.

We should all do so well.

So what do we learn from this?  What do these numbers really mean?

The fact is that loans make up 42% of all student aid, and comprise the lion's share of funds "refunded" to students.  I don't think I have to do the math for you here. The majority of that $186 million in 2011, and next year's 2012 will have to be paid back by students.  What message must we accept?  

Low income students are serfs to the Bank of America of Higher Education.  Higher One is leaching all of our futures.  This is no longer just about students.  Higher One has inspired a renaissance of other parasites.  I hesitate to call them vultures because students ARE alive, and so are all of YOU.  And so is Higher One and their money-changer ilk.

In an effort to be transparent, I have to say that I am a student, and will be a supporter of students long after I hopefully graduate.   But as a thirty-seven year old freshman, I have precious little time, and sorrowfully little money to pay for a private jet for three 3rd basers and their hangers-on at 6.8% interest.

It is to all of our benefit that we end the betrayal of students NOW!  Cast them out!  Sign the petition to keep Higher One's hands off!

Originally posted to Mr Jones on Fri Dec 30, 2011 at 06:35 PM PST.

Also republished by Youth Kos 2.0.

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    What a man can be, he must be.

    by Mr Jones on Fri Dec 30, 2011 at 06:35:41 PM PST

  •  I started college in 1969 (2+ / 0-)
    Recommended by:
    gailwax, farmerchuck

    and knew many people who never paid back their government student loans.

    In those days, people majored in things like philosophy because they wanted to change the world. We looked down on business majors. We conducted sit-ins against ROTC on campus (and got them removed from campus). We got fired upon by National Guardsmen. We were students, in the same sense that the French students in 1968 were students.

    Reagan ended student loans, and changed all that. Now students are lifetime slaves to the capitalists owners as soon as they matriculate.

    I'm 60 now, but I consider the reinstatement of cheap government student loans to be one of the most important progressive issues on the table. Without it, we cannot regain intellectual freedom -- which we have lost.

    •  Thank you (0+ / 0-)

      so much for your support on this issue.  Tell everyone you know.  It needs exposure rather than marginalization.  

      What a man can be, he must be. -- Abraham Maslow

      by Mr Jones on Sun Jan 01, 2012 at 01:22:54 AM PST

      [ Parent ]

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